Australians with energy bill cuts on their Christmas wishlists will be eager to hear the results from a key meeting between federal, state and territory leaders.

Prime Minister Anthony Albanese is set to meet virtually with premiers and chief ministers for national cabinet to discuss how to ease pressures on households struggling with soaring electricity costs.

A cap on coal and gas prices and customer rebates have been flagged.

But the federal opposition warned the meeting’s outcomes must not have unintended, long-term consequences.

Opposition spokesman Simon Birmingham was concerned the government’s potential interventions in the market could scare investors away.

“We have to see the government’s detail … particularly when it comes to gas companies being able to drive a harder bargain without necessarily going down the path of direct regulatory intervention,” he said.

“If you’re creating investment uncertainty on top of that … the government might provide something they claim as short-term relief, but it may actually result in more long-term pain.”

Energy Minister Chris Bowen was confident a deal between the leaders would be reached, but wouldn’t confirm whether rebates for households and businesses were on the table.

“We’ve been looking at our respective powers and those of states – particularly those states with black coal production which is NSW and Queensland – and talking to them about the most effective response,” he said.

“We won’t do anything to fuel inflation … so anything we do will be seeking to reduce the bills before they arrive at the letterbox of the consumers.”

The minister along with his state and territory counterparts have agreed to a capacity mechanism that would rely on renewable energy.

He said it was the biggest step forward towards Australia’s transition to renewables.

“Let’s just be very blunt and frank – coal fired power stations are going to close,” Mr Bowen said.

“The task here is to ensure that new energy comes on not after coal fired power leaves, because that’s too late, but before.”

He said the agreement would encourage investment and create jobs in the renewables sector.

The federal budget forecast a 56 per cent increase in electricity prices and a 44 per cent rise in gas prices for households in the next two years.

– AAP